JKX Oil & Gas PLC June 2017 Monthly Production Report (9229K)

TIDMJKX

RNS Number : 9229K

JKX Oil & Gas PLC

13 July 2017

13 July 2017

JKX Oil & Gas plc

("JKX", the "Company" or the "Group")

June 2017 Monthly Production Report, and

Results of Phase 1 of Rudenkivske fracturing campaign

 
                             June     May    % Change   6 months   6 months   % Change 
                              2017    2017               to June    to June 
                                                          2017       2016 
--------------------------  ------  ------  ---------  ---------  ---------  --------- 
 Total production 
  (boepd(1) )                7,667   7,847    (2.3)%     8,598      10,337    (16.8)% 
--------------------------  ------  ------  ---------  ---------  ---------  --------- 
 Ukraine (boepd)             3,443   3,837   (10.3)%     3,766      4,114      (8.5)% 
 - Average gas production 
  (MMcfd(2) )                14.3    18.6    (23.1)%      17.9       19.2      (6.8)% 
 - Average oil and 
  condensate production 
  (boepd)                     678     744     (8.9)%      717        923      (22.3)% 
--------------------------  ------  ------  ---------  ---------  ---------  --------- 
 Russia (boepd)              4,119   3,860     6.7%      4,654      6,222     (25.2)% 
 - Average gas production 
  (MMcfd)                    24.4    22.9      6.6%       27.6       36.9     (25.2)% 
 - Average condensate 
  production (boepd)          46      44       4.5%        50         66      (24.2)% 
--------------------------  ------  ------  ---------  ---------  ---------  --------- 
 Hungary (boepd)              104     150    (30.7)%      178         -         100% 
 - Average gas production 
  (MMcfd)                     0.6     0.9    (33.3)%      1.0         -         100% 
 - Average condensate 
  production (boepd)           8       5      60.0%        12         -         100% 
--------------------------  ------  ------  ---------  ---------  ---------  --------- 
 

-- Average Group production for June 2017 was 7,667 boepd, a 2.3% month-on-month decrease and a 16.8% year-on-year decrease for the first six months of the year. The year-on-year decrease was largely due to the delayed workover of well 25 in Russia.

-- In Russia, gas production was higher than in May due to the acid treatment on Well 27 completed in June. The workover of Well 25 is now complete. The well is still cleaning up and currently producing at the rate of 7.8 MMscf/d (1300 boepd).

-- In Ukraine, gas production declined primarily due to well 6R being worked over to install a monobore for fracturing resulting in a reduction of production by 1.3 MMscf/d month-on-month. In addition, EM53 on the Elizavetovskoye field also produced 0.6 MMscf/d less than in May, with other reductions being attributed to natural field decline. NN22 workover was completed on the 25(th) June 2017 with an initial rate of 8 MMscf/d and a WHP of 1420 psi after 2 hrs of flow. The production rate has since declined to 1.4 MMscf/d, 10 boepd of condensate and 100 barrels of water per day. A PLT has been run and potential for water shut-off, as well as additional perforations is currently being assessed.

-- Initial results from the appraisal fracturing operations carried out by Poltava Petroleum Company at the Rudenkivske field in Ukraine were disappointing. Following 12 fracture stages at wells 19R, R10, R25 and R6 measureable gas production has been achieved only in 19R, with only trace production of gas in the remaining wells. Fracture stages were placed successfully at a pace of 2.3 days per stage, and at a cost of $230k per stage. However, productivity in all four wells has been greatly inhibited by the stimulation of previously un-identified water-bearing zones intermingled with the target gas zones. The presence of water was not identified using the existing Soviet era well logs during planning. The significant amount of data received from this first phase of appraisal is currently being analysed in order to target gas-bearing zones more accurately in the future.

Tom Reed, advisor to the Board and to the acting CEO, Victor Gladun, had the following comment: 'While the Company is disappointed with initial results from the first phase of fracturing operations, and has a lot of work to do to reassess the contingent resources in the Rudenkivske field, I believe our team has demonstrated a clear ability to transfer international technology and unit costs to Ukraine. I am committed to helping Victor and the Board through the next three months to ensure maximum benefit from phase one of the appraisal program and that the best possible field development plan is adopted going forward.'

(1) boepd - Barrels of oil equivalent per day

(2) MMcfd - Million cubic feet per day

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.

ENDS

   JKX Oil & Gas plc                              [phone] 

Russell Hoare, Chief Financial Officer

   Stockdale Securities                         [phone] 

Robert Finlay, Daniel Harris

   EM Communications                          [phone] 

Stuart Leasor, Jeroen van de Crommenacker

This information is provided by RNS

The company news service from the London Stock Exchange

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July 13, 2017 02:00 ET (06:00 GMT)